What Does the Average Freight Broker Make?

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Whether you’re new to the shipping industry and are eager to learn a new business, or you’re a truck driver looking to get away from those long hauls away from your family, the job of freight broker is an exciting option.   As a freight broker, you work for yourself, create your own hours, and depending on your dedication to the job, you can make a great deal of money.

What is a Freight Broker?

When a company has a shipment they need to make, they pay a freight broker to move the freight.  The freight broker then pays a carrier to ship the product for less than what the original company paid.  This is the freight broker’s spread or his profit. This profit, minus the operating costs is the salary of the freight broker.  A freight broker is the crucial link between shipppers and carriers, sort of a matchmaker between the two.

Freight brokers are also involved with the logistics of shipping.  They negotiate shipping rates, track shipments, and keep track of deliveries and pickups.  They must make sure everything goes off without a hitch and is done in accordance with all laws and procedures.  

How Do I Become a Freight Broker?

Being a freight broker takes dedication and the desire to work on your own.  To become a freight broker you must:

Register your company.  You must register as a business or fill out a DBA (Doing Business As) form.

Make a plan.  To obtain any kind of financing, you usually need to show the lender a business plan.  A business plan also helps guide you through the early stage of your business.

Get a USDOT number.  This is a requirement if you want to operate as a freight broker.  You do this by filling out an application with the Federal Motor Carrier Safety Administration, or FMCSA, form OP-1.  There’s a fee, usually around $300.

Get a surety bond.  A surety bond is a type of insurance.  It guarantees that carriers will be paid for their work.  If for some reason, a shipper refuses to pay a carrier, you would be responsible for paying it.  If you can’t pay it, the surety bond will.

The bond company will check your credit and perform a background check before issuing the bond.  You pay a percentage which is dependant upon your credit.

Obtain a legal process agent.  This is also required by the FMSCA.  There needs to be a legal process agent in every state you do business in.   There is usually a $50 fee.

Get insurance.  Once you’ve filled out all of the appropriate paperwork and have obtained your Motor Carrier Number, you must get general liability and cargo insurance.  They are both required.

Of course, taking a training course is not required but will help you get a leg up in the industry and earn the most money for each shipment.  

What is a Freight Broker’s Salary?

A freight broker’s salary can vary greatly.  Indeed.com puts the average at $51,032, Linkedin puts it in the range of $30,000-83,000, and Careeronestop.org has it at $25,000-65,000.  Payscale.com has it at the highest with a range of $41,940-143,000 but all of these ranges are dependant on several factors including experience, skills, and knowledge of the industry.  

Above and Beyond

Having a large database of contacts is important to earning a higher salary as a freight broker.  Being able to provide your clients with excellent service with affordable rates will build lasting working relationships.  Some states bring in a higher salary for freight brokers than others, the highest ones being CT, WA, OR, NE and Washington D.C.  The salary for these states is higher than the national average.

Typically, freight brokers who make the highest salaries are those who have freight agents working for them.  A freight agent is an independent contractor who coordinates shipments with carriers but they aren’t required to have the insurance that a freight broker does.  They work for the freight broker who carries all of the insurance and business licenses and expenses. The more shipments made, the more commissions are earned which is why the most successful freight brokers hire freight agents to work for them.  

Being a freight broker can be a lucrative job for the right person.  The freight broker industry is expected to remain strong. More and more people rely on online shopping each year which means more trucks on the road.  Even if those trucks eventually become self-driving vehicles, freight brokers will still be in high demand.

JW Surety Bonds, America’s #1 volume surety bond service, has a comprehensive guide that can take you from the planning stages to running your own successful freight brokerage company. If you’re interested in starting your own freight brokering business, you can find the guide here.

DirectFreight.com is an essential tool for freight brokers.  It’s an easy-to-use load board that allows you to find loads and carriers, as well as provides destinations, load specifications, credit reports, and has useful tools such as mile calculators, fuel price data, and other useful features, all for a low monthly fee.  Call us today at (888)894-4198 or go to https://www.directfreight.com/home/ to sign up for a free 15-day trial.  With DirectFreight, your freight broker company will have the tools it needs to become a success.

Load Matching Software

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The shipping industry is a constantly growing and changing industry.  As a consumer of trucking-related software, it becomes more and more important that you adapt to the latest technologies to run the most efficient operation possible.  Whether you’re a freight broker or a carrier, you want to provide a vital, superior service to your customers and to do this, you need high-quality load matching software that’s user-friendly, efficient, and won’t break the bank.

What to Look For in a Load Matching Software

All software is not created equal.   Good load matching software should be streamlined and efficient, and have features such as:

  • Load and Truck Searching – on your computer or your phone so you can be connected wherever you are
  • Load and Truck Posting – to show availability
  • Email Alerts – information on your loads and trucks sent directly to your inbox
  • Credit Reports and Scores – so you know who you’re trusting
  • Customization – get only the information you need and none that you don’t
  • Load and Truck Search Filters – for more efficient searches
  • Weather Information – so you’re aware of any weather-related delays
  • Mileage Calculator – including tolls and how to avoid them
  • Organization – manage all your loads
  • Cloud-based

Why Cloud-based is Better

Having software that is in the cloud offers benefits to shippers, vendors, and truckers alike.  Because it is managed in one central location, updates and changes can be done without disrupting user access.  It can be accessed from anywhere using any mobile device, whether a laptop, iPad, or phone.

Cyber security is a top priority for every business, and because your data is in the cloud, it is automatically backed up so you don’t have to worry about power outages or viruses infecting your work computers or servers and destroying your data.  And with no servers or software at your location, there’s no need to

Cloud-based software allows users to find and post freight from anywhere  For truckers and carriers looking for freight, searches will always include the most up-to-date information.  The streamlined process of a web-based system saves time and money. Such advantages are not merely for the large companies, however, web-based freight matching software can be accessed using an affordable monthly fee which allows it to be utilized by large companies or individuals, essentially leveling the playing field.

Direct Freight Services

The software offered by Direct Freight Services is your solution for finding freight whether your business is big or small.  It has all of the services you need without complicated applications that you’ll never use. A small monthly fee grants you access to the simple, streamlined system where you can search for trucks if you have a load to transport or search for loads if you have a truck.  Or, if you prefer, list your load or truck and let interested parties search for you. It couldn’t be easier. Its interface is direct and simple so your searches will be quick.

Our Direct Freight Software will make your operation more efficient, allowing you to move more freight with fewer people, and with the availability of credit information, you can minimize your risks and make informed decisions about who you’re working with.  

To find out more about how our direct freight software can improve your bottom line, call (888)894-4198 or go here to sign up for a free 15-day trial offer.  Start your search today!

eCommerce and Its Effect on the Shipping Industry

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Since its inception in 1995, Amazon changed how the world shopped.  eCommerce took hold, giving consumers more choice and more convenience, bypassing the traditional brick and mortar stores, and now, more than 79% of Americans shop online.  eCommerce widened the playing field and no longer did merchants have to get their product into stores; with a good website, sellers could set up shop in their garages and ship their goods directly to consumers.  

The popularity of eCommerce has had a tremendous impact on the trucking industry.  While shipments of raw materials from one business to another have remained unchanged, the shipping patterns of finished products have changed dramatically.   Stores not only are stocked on a regular basis, but to remain competitive, they now rely heavily on eCommerce to drive sales. Online sales from retail chains may be delivered directly to the consumer, or they may be picked up at the store’s location which may add to their number of deliveries.  

Amazon’s two-day delivery model has had repercussions can be felt across all delivery platforms.  Consumers now have an expectation that whatever vendor they choose, when they sign on to a website and place an order, it will arrive within 2-3 days. This change in expectations has changed how all carriers do business.  The strict demand has led to an increase in smaller trucks being used more frequently instead of half-filled larger trucks. Because of this, the amount of commercial traffic on our highways has been steadily increasing, and the DOT projects that freight volume will grow by 45% by the year 2040.  Noise and air pollution are on the rise as well.  In order to stay in the race, trucking companies must be ready to adapt.  They need to become more efficient.

Advancements in technologies promise deliveries will eventually be made using drones and self-driving vehicles, however, these technologies are hardly perfected and they’re expensive.  This is where trucking companies need to step in and fill the demand. Large carriers are adapting by changing equipment such as adding smaller trailers to be able to traverse compact neighborhoods.  

Retailers and manufacturers have found a solution to the 2-day shipping expectation problem:  they’re opening more distribution centers across the country to cut down on shipping times. This means more half-filled trucks as well.

Another effect that Amazon has had on the marketplace is in shipping transparency.  Consumers demand to see where their package is all along its travel route. Larger carriers such as UPS and FedEx have set the bar high for tracking expectations, and at any time throughout its travels, a package can be located and its delivery predicted down to the hour.  To compete in the market, carriers must provide this kind of precise tracking services.

Consumers also have greater control over where they want their package delivered.  Home or office? At the store? With transparency, you may not have to have the lowest rates to come out on top.  People value good service and may be willing to pay a little more to get the product delivered quickly. However, it’s a tightrope walk with shipping rates.  The number one reason that consumers don’t complete a purchase and abandon their online shopping cart is higher-than-expected shipping costs.  

People aren’t only buying gifts and gadgets online.  Increasingly, consumers are turning to the internet for everyday items such as cosmetics, personal care items, furniture and even groceries.  It’s estimated that 20% of traditional brick and mortar stores will close in the next 5-8 years as online retailers take over more and more of the market.   

With Amazon poised to start their own direct shipping to compete with UPS and FedEx, it’s more important than ever for trucking companies to make changes in order to remain players in the intense competition in the trucking industry. It’s time to streamline operations and install and implement Electronic Logging Devices in vehicles as well as look to improve operating efficiencies, whether that means smaller trucks, shorter runs, or improvements in logistics.  Big changes in the shipping industry are already here. It’s time to step up and meet the challenge before you get left behind.